Unit 8: Distribution

Choose the Channel Chapter 8

Global Channels of DistributionLesson 8.1

Lesson Essential Questions

1. How has distribution channels adapted over time to fit the needs of customers?

2. How has the change of distribution channels affected how marketers sell their product to customers?

3. Compare and contrast different types of distribution channels and determine how the different types of channels work in different situations.

Distribution• One of the four elements of the marketing mix.

• Involves the transportation of a product or service.

• Moves the product to the customer.

Free Enterprise• An economic system that allows the

unregulated supply and demand of products to drive the economy.

• Controlled Market• Supply, pricing, and distribution policies are set

directly by the government.

Facts About Trading Entertainment

• International Products are discouraged through restrictions and tariffs.

• United States has no formal barriers to the import of audiovisual entertainment.

• European countries try to reserve at least half of their programming to shows with European origin.

Sports and Entertainment• Available via two forms (channels):

• Live Events• Media

Live Events• Historically, the only way to view an event was

to view it live.

• Amphitheaters• Oval shaped outdoor theaters with tiered seating

around a central staging area.

• Venue• The facility where the event is held. • Limited to the number of people who can be

accommodated.

Media• Mass media

• Means of distributing an event to a large volume of people – the masses.

• Radio• Television• Internet

• Allows for massive marketing opportunities beyond what is available with a live audience.

Platforms• Types of delivery systems.

• What are different types of delivery systems?

Sports DistributionLesson 8.2

Lesson Essential Questions

1. How are media types determined for different sporting events?

2. How do organizations within sports affect the distribution of sporting events?

3. How are media types determined for different entertainment events?

4. Compare and contrast how sports and entertainment are distributed differently to fans.

Marketers Challenge• Motivate people to actively participate in sports

and activities that interest them.

• Rising costs of professional sports may reduce people’s interest.

• Smart marketers will fill the gap by promoting and forming recreational sports.

Amateur Athletes• Someone who is not paid, but plays for

enjoyment and challenge.

• Can be of any age and have physical challenges.

The Balancing Act• Sports facilities need to be available where they

are needed.

• Community leaders must recognize the need for recreational space when planning.

• Must consider environmental impact:• Backpacking• Off-road driving• Rock climbing

The Relation• Participation in recreational sports is directly

related to income. • Prices needed for equipment• Access to good facilities• Difference in private and public facilities

Title IX• An amendment in 1972 to federal education law

that prohibits discrimination against females in school sports.

• Schools must provide females with access

Winning Teams• Economic implications for the community,

region, and state?

NCAA’s Role• Governing body of college and university

athletic programs.

• Determines:• How postseason bowl games:

• Are licensed• Organizations must pay for

• Both teams’ travel• Participation expenses

• Made Available to the fans

Rankings Role• Determined based on:

• Past team performance• Talent• Team schedules

• Televised games mean more money.

• BCS Rankings• USA Today Coaches’ Poll• Harris Interactive College Football Poll• Average of six computer rankings

Economies Role• Market driven:

• Sports are distributed based on popularity.• Offered at the highest price the market will bear.

• Government driven:• Sports are not always readily available.• Distribution channels are tightly controlled.

Cartel• A combination of independent businesses

formed to regulate professional sports.

• Example:• A number of independent sport teams grouped

together and governed by a league agreement.

• Federal antitrust laws prohibits cartels, special legislation exempts professional sports leagues.

League Agreement• Controls the marketing mix and governs the

distribution of the games, including the locations of the teams and the number of teams allowed to operate within the league.

Starting a New Team• Regions with a large potential customer base

• Owners request public funds to subsidize the new team.

• Local government must have the support of the tax payers.

• Consider subsidies as an investment.

• Existing leagues’ owners determine price.• Expansion fee that is distributed amongst the

owners.

Fun Facts:• What does it take to host a Super Bowl?

• Requirements• 20 pages of NFL requirements including:

• 20,000 available hotel rooms• 65 limousines available for NFL use only• 1,000 busses available for transporting fans• Many private and public golf courses nearby

• Gains:• Lodging, food, beverage, and entertainment: $129 Million• Sales Taxes: 3.2 Million• Net proceeds: $913,397

Entertainment DistributionLesson 8.3

Movies• Made with the demographics of a particular

audience in mind.

• Location of movie theaters is key.

• Timing plays a part in the total marketing strategy.

Movie Preview• The release of a movie to a limited number of

theaters prior to its official release.

• Generates buzz about the movie that helps promote it.

Art House Movies• Movies outside the mainstream of popular

subjects. • Independent films

Expenses• Low budget films

• Costing less than $250,000 to produce.• Low advertising

• Show at film festivals • Internet advertising

• Released in off season

Wide Release• Involves distributing a movie nationally to a

thousand or more theaters at the same time.

Mass-Market Retailers• DVDs – Digital Video Discs

• POP displays – Point of Purchase• Houses movies or CDs• Effective promotional tool

New Distribution Techniques• Online DVD rental business

• Netflix• Blockbuster

• DVDs are convenient size and weight• Easily mailed

Distribution of Music• How it evolved:

• Live performances – only• 12’’ grooved vinyl disk played on phonographs• Audiotape• Compact Disc• Digital files

• First models forced users to sacrifice quality over quantity• Docking Stations

• Enables iPods to be connected to speakers that project the music throughout a room.

Technology and Distribution MediaLesson 8.4

Lesson Essential Questions

1. How has change in technology affected the distribution of sports and entertainment marketing?

2. Compare and contrast the advantages and disadvantages of old and new technology and identify how marketers can appropriately use both.

3. How can marketers prepare themselves for a world of changing technology?

Media Merge• Lines between the various information,

communication, and entertainment media have become more blurred.

• Entertainment companies:• Branched into multiple venues• Creating cross-promotional opportunities• Integrating new technologies

Podcasts• A way of distributing multimedia files over the

Internet for playback on computers, iPods, cell phones, and other mobile devices.

• Television stations are using Podcasts as a way of distributing programs.

HDTV• Estimated that by 2008, 29 million homes will

have HDTV.

• FCC issued a mandate:• All television transmissions must convert from

analog to digital format by August 2009.• Consumers will need to purchase a set-top

converter.

Radio• Converting to digital formats.

• XM, Sirius, WorldSpace

• Three Components:• Satellites that orbit the earth.• Ground stations that transmit signals to the

satellites.• Radio receivers that unscramble the signals for the

listeners.

Web Broadcasts• Groups of television networks, production

studios, and related entertainment businesses that produce shows or provide services for other members in the group.

• Vertical Integration:• When one company controls several different areas

of the same industry.

Internet Music Revolution• File-Sharing – making files available for others

to download.

• Piracy – unauthorized copying

MP3• A digital audio encoding and compression

format designed to greatly reduce the amount of data required to represent audio.

Section Review

The parts of a satellite radio system include all of the following except:

A. Satellites that orbit the earth

B. Ground Stations that transmit signals to the satellites

C. Radio receivers that unscramble the signals

D. MP3 software that compresses the unscrambled signals to digital format.

Section Review

Conversion to digital TV was driven byA. Consumers

B. The FCC

C. The broadcast industry

D. TV manufacturers.

Chapter Review

A combination of independent businesses formed to regulate production, pricing, and marketing of a product is called:

A. Vertical integration

B. A cartel

C. Free enterprise

D. A podcast.